Middle East 'fertile soil' for e-commerce

A rapidly expanding Internet audience coupled with a strong logistics infrastructure from the ground up has led to the Middle East becoming a fertile soil for e-commerce, says Nick Maclean, managing director of CBRE Middle East.
He also noted that while the e-commerce market is currently dominated by a handful of players, a rapid growth in the sector and the upward trajectory of local companies has attracted an influx of investment in recent years. The evolution in consumer behaviour, mobile technology, and retail shopping will continue to revolutionise the e-commerce sector in the region in the years to come. The growth of e-commerce in the region is also complimenting bricks and mortar stores and aiding the physical shopping experience for consumers.
CBRE's latest 'How Global is the Business of Retail?' report noted that Dubai ranks number three in terms of new market entrants, welcoming 59 new brands in 2016; 32 per cent of these new entrants were specialist retailers, many of which were athletic-leisure brands such as Under Armour, Jordan, New Balance, and GapFit. Dubai also retained second position for international retailer representation for the sixth consecutive year, closely behind London which retained the number one position. With high occupancy levels in major retail hubs and many malls approaching full capacity, Dubai's overall retail sector remained resilient in 2016.
"Dubai's global air connectivity and its stature as a hub for trade between the East and West has clearly given an added impetus to the retail sector. Dubai continues to remain the clear destination of choice for the majority of the brands looking to enter the region, frequently using the emirate as a stepping stone to wider regional expansion programmes," added Maclean.
Globally, the report revealed that Hong Kong retained its position as the top target market for new entrants in 2016 with 87 new entrants, followed by London in second place with 65 new entrants. Doha rose six places in the new entrants' ranking, with 58 new brands establishing themselves in 2016 compared with 29 in 2015.
Speaking on the importance of having an online presence today, Anurag Bajpai, a partner with KPMG and the head of retail in the UAE and Oman, said that consumers are shopping all the time and everywhere. "They can now buy from any retailer or manufacturer from anywhere in the world - even from retailers with no physical presence; hence, creating an online shopping experience is becoming more vital - and more complex - every day."
Bajpai also pointed out that 58 per cent of the products purchased online by UAE consumers were sourced from outside the region, far higher than the global average. This would indicate that there could be considerable online opportunities for local retailers.
- rohma@khaleejtimes.com